Will Prime Day Rob Amazon’s Holiday Sales?

By Douglas A. McIntyre Published Oct 18, 6:45AM EDT

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Amazon.com, Inc (NASDAQ: AMZN | AMZN Price Prediction) posted over $10 billion in revenue over the nearly two-day course of Prime Day, its huge annual sale. To put the figure in context, its e-commerce revenue in the second quarter of the year, the most recently reported, was $77 billion. That’s about $800 million a day. The question that will not be answered, perhaps until Amazon announces its fourth-quarter numbers, is whether people who could have bought holiday gifts in November and December bought them on Prime Day instead.

When Prime Day fell on its traditional date in July, the chance it would be an event to buy gifts for the holidays was close to zero. Research from organizations like the National Retail Federation shows that shoppers still start their heavy buying around Thanksgiving, Black Friday, and Cyber Monday. That is when retailers launch their large sales events after stocking up on inventory. Heavy buying stays in place until just before Christmas.

2020 is different. E-commerce has become more prevelant as a means of shopping this year so far. largely due to the spread of COVID-19. Forrester Research expects e-commerce to represent 20% of all holiday sales as total revenue from online sales rises 18% from last year. Bricks-and-mortar sales are expected to rise only 1% for the same period. If the pandemic shutters traditional retailers, the one-in-five ratio of e-commerce to traditional retailers could tip more in the direction of e-commerce.

No one knows today whether retail sales revenue for the holiday will be a zero sum game. If the national pie stays the same as last year, Amazon may be competing with itself, trying to get shoppers who spent money on Prime Day to spend more again in November and December. Prime Day revenue is already greater than Amazon’s Cyber Monday and Black Friday combined. Prime Day this year may have become the day when Prime members did all or most of their holiday shopping. In other words, they may be done.

Amazon has to contend with retailers who have become more sophisticated with their own e-commerce operations each year. Walmart Inc (NYSE: WMT)Target Corp (NYSE: TGT), and Best Buy offered special sales over the course of Prime Day to keep from having their sales decimated. (They may have pulled their own revenue forward from holiday sales as well.)

Prime Day was a wild success. There is no denying it. However, it may cause Amazon’s holiday sales to suffer.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.